At Q3 Earnings, Vornado Sees No Mamdani Pullback

Steven Roth opened Vornado Realty Trust’s Election Day third-quarter earnings call with politics.

“The election in New York City with the prospect of a Democrat socialist mayor has attracted enormous attention,” Roth said. “I’m an optimist and believe that everything will work out for the best. Importantly, with respect to the prospect of a Mamdani mayoralty, we have not seen any pullback or hesitancy in space demand from our customers. In fact, the opposite.”

The Vornado chairman and CEO stayed upbeat as he turned to the topic of real estate. Manhattan’s office market has entered what he called “the third inning” of a new growth cycle, with availability at Class A “better buildings” tightening rapidly. Roth said the market has flipped from favoring tenants to landlords.

Revenue for the third quarter was $453.7 million, a 2.4 percent year-over-year increase. Net income for the first three quarters was $842 million, up from $7.1 million, due largely to the $1.6 billion master lease with NYU at 770 Broadway, which resulted in an $803 million gain.

“Our business is good — really good — and growing stronger,” Roth said.

Vornado leased 3.7 million square feet through the first nine months of 2025, including 2.8 million in Manhattan. The REIT expects Manhattan office leasing volume to notch its highest year in over a decade and its second-highest year on record, Roth said. Excluding NYU’s master lease at 770 Broadway, new Manhattan deals averaged $99 per square foot.

“Tenant demand is robust,” Roth said. “Companies are expanding, demand is broad-based across all industries and available space in the better buildings continues to evaporate quickly.”

The firm’s crown jewel — the Penn District — continues to outperform. Penn 2 is 78 percent leased and expected to surpass 80 percent by year-end. At Penn 1, Vornado has leased 1.6 million square feet since the start of its redevelopment in 2021, with average starting rents of $94, Roth said.

“It’s clear that the tipping point for the Penn District — our three-block-long city-within-a-city, is now behind us,” Roth said.

The firm is in the planning stages for a 475-unit residential building at the northeast corner of West 34th Street and Eighth Avenue with construction slated to begin next year. It’s also moving ahead with an overhaul of the “junky retail” on both sides of Seventh Avenue and 34th Street into “attractive, modern and exciting retail offerings,” Roth said.

Roth also said that Vornado is speaking with potential tenants for “substantial blocks of space” at the old Hotel Pennsylvania site, known as Penn 15, which is expected to be office with some residential space. He didn’t, however, reveal how far along those talks are or who might be interested.

Meanwhile, Vornado is doubling down on Midtown with its acquisition of 623 Fifth Avenue, a mostly vacant tower above the Saks Fifth Avenue flagship store that Roth called a “blank slate” for redevelopment into a “very best, elite” boutique office building by the end of 2027. And its 1.8 million-square-foot 350 Park Avenue tower with Ken Griffin’s Citadel remains on schedule to begin demolition next year, with tenant interest reportedly already emerging.

“We’re growing in New York — and we’re growing smartly,” Roth said.